Saturday, April 15, 2017

ATMs Running Out of Cash in India

India’s cash machines are running dry again, prompting accusations that the central bank is not doing enough to make money available five months after Narendra Modi summarily cancelled most of the country’s banknotes, reports The Financial Times.

Government officials have repeatedly claimed cash supply is back to normal after demonetisation caused a severe liquidity crunch in a country where more than half of transactions by value are still carried out using notes.

But after ATMs in cities including Mumbai, Bangalore, Chennai and Pune ran out of money this month, analysts say the central bank has slowed its currency printing too soon, with notes in circulation only two-thirds what they were before demonetisation.

ATM operators, which collect money from banks to refill cash machines, say bank branches are hoarding notes to serve their own customers, instead of distributing them more widely across the country, according to FT.

According to NSG Rao, secretary of India’s Cash Logistics Association, a trade body for cash managers, ATMs are running at 65 per cent of their capacity.

Learn the Lesson: Keep some cash under your mattress. You just never know what a government will be up to.